Bloomberg News

Chicago Fed National Activity Index for May (Text)

By Editor: [bn:PRSN=3214650] Alex Tanzi []
June 24, 2013

Following is the text of the Chicago
Fed’s National Activity Index from the Federal Reserve Bank of
Chicago.

Led by improvements in production-related indicators, the
Chicago Fed National Activity Index (CFNAI) increased to -0.30
in May from -0.52 in April. Two of the four broad categories of
indicators that make up the index increased from April, but only
one of the four categories made a positive contribution to the
index in May.

The index’s three-month moving average, CFNAI-MA3, decreased to
-0.43 in May from -0.13 in April, marking its third consecutive
reading below zero and its lowest level since October 2012.
May’s CFNAI-MA3 suggests that growth in national economic
activity was below its historical trend. The economic growth
reflected in this level of the CFNAI-MA3 suggests subdued
inflationary pressure from economic activity over the coming
year.

The CFNAI Diffusion Index decreased to -0.35 in May from -0.08
in April. Thirty-three of the 85 individual indicators made
positive contributions to the CFNAI in May, while 52 made
negative contributions. Forty-nine indicators improved from
April to May, while 35 indicators deteriorated. Of the
indicators that improved, 25 made negative contributions.

Production-related indicators contributed -0.10 to the CFNAI in
May, up from -0.33 in April. The level of industrial production
was unchanged in May after decreasing 0.4 percent in April.
However, the Institute for Supply Management’s Manufacturing
Purchasing Managers’ Index fell below 50 in May, decreasing to
49.0 from 50.7 in April.

Employment-related indicators contributed +0.01 to the CFNAI in
May, up from -0.06 in April. The unemployment rate ticked up to
7.6 percent in May from 7.5 percent in April, but nonfarm
payrolls rose by 175,000 in May after increasing by 149,000 in
the previous month.

The contribution from the consumption and housing category to
the CFNAI in May was unchanged from the previous month at -0.17.
Housing permits decreased to 974,000 annualized units in May
from 1,005,000 in April, while housing starts increased to
914,000 annualized units in May from 856,000 in the previous
month.

The contribution from the sales, orders, and inventories
category to the CFNAI in May was also negative, moving down to -
0.04 from +0.03 in April.

The CFNAI was constructed using data available as of June 20,
2013. At that time, May data for 51 of the 85 indicators had
been published. For all missing data, estimates were used in
constructing the index. The April monthly index was revised to -
0.52 from an initial estimate of -0.53, and the March monthly
index was revised to -0.48 from last month’s estimate of -0.23.
Revisions to the monthly index can be attributed to two main
factors: revisions in previously published data and differences
between the estimates of previously unavailable data and
subsequently published data. The revision to the April monthly
index was due primarily to the former, while the revision to the
March monthly index was due primarily to the latter.